Ag, Ethanol Groups to Trump – We Need Relief Now, Not Later – DTN

Leaders of several agriculture and ethanol groups on Wednesday appealed to President Donald Trump to immediately approve year-round sales of E15 and to reallocate Renewable Fuel Standard small-refinery waivers to larger refiners.

Agriculture and ethanol interests have pressed Trump for the better part of a year to make the changes. Previous EPA Administrator Scott Pruitt did not take action on E15, although Trump said publicly his administration would act.

“Thousands of manufacturing and farming jobs in America’s Heartland are now at risk due to the EPA’s recent mismanagement of the RFS and inexplicable delay in removing the de facto summertime ban on E15,” the groups wrote in a letter to Trump.

The letter is signed by Kevin Skunes, president of the National Corn Growers Association; Roger Johnson, president of the National Farmers Union; Bob Dinneen, president and CEO of the Renewable Fuels Association; Emily Skor, CEO of Growth Energy; Zippy Duvall, president of the American Farm Bureau Federation; Don Bloss, chairman of the National Sorghum Producers; and Brian Jennings, CEO of the American Coalition for Ethanol.

“With ethanol prices hitting a 13-year low and net-farm income plummeting to half of the record $123 billion achieved in 2013, such an announcement could not come at a more critical juncture for rural America,” the letter said.

“The situation is even more dire in the grain markets, where prices received by farmers are sagging below the cost of production. With a near-record corn crop expected this fall and tariffs putting a damper on trade opportunities, farmers desperately need expanded access to markets and new sources of demand.”

According to its own numbers detailed in the latest renewable volume obligations proposal, the EPA granted a total of 49 waivers for 2016 and 2017. The EPA said it waived a total of 2.25 billion gallons in those years. EPA Acting Administrator Andrew Wheeler indicated the agency will continue to consider future waiver requests in the same manner.

In addition, Wheeler has said E15 would need to be part of a package deal to include something for small refiners as well.

Frank Maisano, senior principle at Bracewell LLP in Washington, D.C., a law and government relations firm representing refiners, said he believes government data shows demand hasn’t been lost.

“The ethanol lobby has been claiming that low RINs costs and small refinery waivers are creating demand destruction, meaning decreased U.S. ethanol production,” he said.

“That would be concerning for America’s farmers if it were true. However, the data continues to cast doubt on the claim. Once again, the ethanol advocates continue to highlight the same terrible policies and incorrect information that has clouded their judgement about the badly broken RFS and the need for reform.”

Maisano points to recent data from the U.S. Energy Information Administration, in making the case the ethanol industry has not experienced lost demand.

On Aug. 7, 2018, the EIA raised its 2018 fuel ethanol consumption in its short-term energy outlook to 946,000 barrels per day (bpd) from 942,000. On Tuesday, however, the EIA updated the 2018 fuel ethanol consumption downward to 943,000 bpd, which is lower than the 945,000 bpd in 2017.

Unless the EPA changes the way it considers small-refinery waiver requests to the Renewable Fuel Standard, the ethanol industry could continue to suffer major market losses in the years to come, according to the University of Missouri’s Food and Agriculture Policy Research Institute’s recently published update to its March 2018 U.S. baseline outlook for agricultural and biofuel markets.

Economists at FAPRI conclude the industry could lose about 4.6 billion gallons of domestic demand and almost $20 billion in lost sales revenue in the next six years if the agency continues to grant waivers at its current rate.

U.S. ethanol consumption drops by an average of 761 million gallons annually between 2018 and 2023, or a total of 4.6 billion gallons during the six-year period. That is the equivalent of 1.64 billion bushels of corn demand lost, or nearly 300 million bushels per year, according to FAPRI’s numbers.

Refineries producing transportation fuel are required by the RFS to demonstrate each year that they have blended certain volumes of renewable fuel into gasoline or diesel fuel, or acquired RINs.

The RFS allows certain small refineries — those that produce 75,000 barrels or less per day — to petition EPA for a temporary extension of an exemption.

To date, EPA has yet to make public details regarding how it determines who qualifies for small-refinery exemptions.

Editor’s Note: Late in the week, the Ninth Circuit Court of Appeals voided the registration for dicamba-based herbicides used with related seed train technology. The products included Engenia, Xtendimax and […]